This market brief is an overview of the week ahead and some of the events we see as being important to the markets.
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INDICES AUSTRALASIA ASX – 5879 ( +14 or +0.24% ) The ASX continues to creep higher. Will we see a breakout of this sideways range to finally test 6000 this week? We will be discussing this market this week in the LIVE CHAT ROOM . VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday. For a continued move higher we must now see the ASX break and close above 5921. Should this occur we will look for a move to 5985. A break through this level could see a retest of 6000; and if momentum is very strong we cannot rule out a move to 6140. If the ASX cannot close above 5921, we will look for a move back down to 5823. A strong break and close below this level could see the ASX test 5777, and if momentum is strong we could quickly see further moves down to 5746 and 5705.
EUROPE DAX – 12225 ( -91 or -0.74% ) The DAX came within 20 points of the all-time high last week. With less than one month to go until the French election is over, we ask the same question: Can the DAX post all-time highs this week? Further commentary will be posted in our MEMBER PORTAL this week. VOLATILITY ALERT: German ZEW Economic Sentiment on Tuesday. For a continued move to the upside we must see the DAX hold above 12198. Should this occur a break and close above 12381 sets up a scenario to retest the ALL-TIME HIGH’s at 12404. A strong break and close above this level could see a very quick move to 12714. If the DAX fails to hold above 12198, we will look for a move back down to 12044. A strong break below this level is likely to see a push further down into 11875, and if downside pressure is strong this week a sharp move down to the 11788 – 11754 area cannot be ruled out.
US SP500 – 2355 ( -7 or -0.3% ) Last Friday markets were surprised by Trump’s attack on Syria. After a pre-market sell-off the move was completely faded to the upside. Like other Indices this market remains range bound with key levels on both sides of the ledger. VOLATILITY ALERT: Yellen speaks on Tuesday, Monthly PPI and Prelim UoM Consumer Sentiment on Thursday, Monthly CPI and Retail Sales on Friday. For a move higher we must continue to see the S&P hold above our key level of 2334. Should this hold we will look for a move to 2376, and further breaks to the upside could see a retest of 2386. Should momentum to the upside remain strong, a move back up to 2400 cannot be ruled out. If we cannot hold above 2334, WATCH OUT for sharp move down to 2312. A close below this level could see further downside to 2292.
FOREX AUD/USD – 0.7502 ( -123 or -1.61% ) After the RBA left rates unchanged the Aussie Dollar took a nosedive. We saw the bears maintain this selling pressure all week. The AUD came into our first key level at 0.7516 as expected, and almost reached our next big level from last week at 0.7489! VOLATILITY ALERT: NAB Business Confidence on Tuesday, Unemployment Rate on Thursday. For a move higher we would like to see this market now hold above above 0.7489. Should this occur we will look for a retest of 0.7561. A strong break and close above this key level could see this market rally to 0.7617 before a pause. Should we continue to break lower, a close below 0.7489 may result in a move down to 0.7447. Should we break strongly through this level, we cannot rule out a sharp move down to 0.7364 by the end of this week.
EUR/USD – 1.0591 ( -66 or -0.62% ) The EURO is sitting tightly at a VERY KEY LEVEL here at 1.0570. Like the AUD the EURO has also shown weakness and it’s now or never for buyers to step back into this market. Last week we mentioned watch out for a move to 1.0570 before a pause and we are seeing this NOW . VOLATILITY ALERT: German ZEW Economic Sentiment on Tuesday. For a sustained move higher we must first see this market hold the very important level at 1.0570, followed by a break and close above 1.0631. Should this occur we may see a retest of 1.0738, and if momentum is very strong this week we will look for a move back up to 1.0814. If we cannot hold above 1.0570, we will look for a sharp move down to 1.0525. Should downside momentum remain strong we will look for a move to 1.0462, and if the market breaks this level- a retest of 1.0409 is our next downside target.
GBP/USD – 1.2370 ( -182 or -1.45% ) Cable continues to trade within its large sideways base. Article 50 is done and we now officially move to the ‘negotiation’ phase. VOLATILITY ALERT: Annual CPI on Tuesday, Unemployment Rate on Wednesday. For a move to the upside we would like to this market break and close above 1.2480. A strong break and close above this level could see a retest of 1.2622. If momentum continues and remains strong to the upside we will look for a move to 1.2720. If the GBP cannot close above 1.2480, we will look for a move back down to 1.2297. A close below this level could result in quick move to 1.2240, and if this market continues to sell-off we will look for a move down to 1.2221.
USD/JPY – 111.12 ( -25 or -0.22% ) The $/YEN is really stuck between a rock and a hard place. Contrary to the BoJ’s wishes, the YEN continues to strengthen against other markets. HOWEVER- the longer this base holds the bigger the move higher we may see… For a continued move to the upside we must now see this market hold above 111.09. Should this occur we will look for a move back up to 111.73, and a retest of the key level at 112.22. Should we break and close above 112.22 we could see a strong move into 113.87 – 114.08, and if momentum is very strong a move higher into 114.52 cannot be ruled out by week’s end. If we cannot hold above 111.09, the YEN may see further downside into a key area between 110.10 – 109.94. A strong break and close below 109.94 may result in further downside into 109.21, and if downside momentum is very strong this week 108.31 cannot be ruled out.
COMMODITIES GOLD – 1254 ( +5 or +0.4% ) Like the YEN Gold is stuck within a very tight range. Does this market move substantially higher or lower from here this week? We will be discussing this in more detail in our MEMBER PORTAL . For a continued move higher we would like to see this market hold above 1247, followed by a retest of 1257. Should this occur we will look for a continued rally into the key 1276 – 1278 area. If Gold cannot hold above 1247, we will look for a move lower into 1222. A strong break below this level could then see a retest of the very important 1206 level by week’s end.
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